Prince Pipes and Fittings Ltd, a maker of PVC pipes for plumbing, irrigation and sewage works, has received regulatory approval for an initial public offering (IPO).
Prince Pipes received approval from the Securities and Exchange Board of India on 3 November, taking the tally of companies that have received regulatory approvals for IPOs in 2017 to 39.
Mumbai-based Price Pipes had filed its draft red herring prospectus on 27 September.
The IPO size is Rs 700 crore ($106.5 million), according to the prospectus. The company will issue fresh shares worth Rs 500 crore and its promoters will sell shares worth Rs 200 crore.
Prince Pipes joins a clutch of companies looking to go public to benefit from the stock market boom in India this year. The company will join listed peers Astral Poly Technik, Jain Irrigation Systems and Finolex Industries on the bourses.
Jain Irrigation has gained roughly 25% this year while Astral Poly has jumped 92% and Finolex has climbed about 62% on the BSE, stock-exchange data showed.
Prince Pipes will use the net proceeds of the issue to repay loans, set up a new factory and upgrade equipment at existing manufacturing facilities as well as for general corporate purposes. The proceeds of the secondary sale will go to existing shareholders.
JM Financial Institutional Securities Ltd and Edelweiss Financial Services Ltd are the merchant bankers managing Prince Pipes’ IPO.
The company sells its products under two brand names—Prince Piping Systems and Trubore Piping Systems—through 766 distributors spread across India as of 31 August 2017.
The company has five manufacturing plants, in Athal and Dadra (Union Territory of Dadra and Nagar Haveli), Haridwar (Uttarakhand), Chennai (Tamil Nadu) and Kolhapur (Maharashtra).
The total installed capacity of its five existing plants was 210,646 tonnes a year as of 31 August 2017.
The company plans to set up two new manufacturing plants—one at Jobner (Rajasthan) and another at Sangareddy (Telangana).
The firm reported a net profit of Rs 74.36 crore on total revenue from operations of Rs 1,262.58 crore for 2016-17.
Its revenue was Rs 1,008.98 crore in 2015-16 and Rs 957.19 crore the year before. The company’s net profit was Rs 29.36 crore in 2015-16 and Rs 15.68 crore in 2014-15. Its revenues grew at a compounded rate of 14.85% from 2015 to 2017 while net profit rose at the rate of 118%.